What distinctive approach can Koreans offer the investment space around the world?
Korean companies have the eagerness and vision to go abroad and replicate the success of Samsung, LG and Hyundai, which are all from Korea. This is clear evidence that Korean companies are not just focusing on the domestic market but successfully expanding overseas. They have become multinational companies with extensive global footprints.
Mirae recently purchased Prudential’s life subsidiary in Korea. How is the acquisition strategy going?
We have three main business units. One is the asset management side, which is quite globalised, another is an investment banking/brokerage and wealth management business.
The third arm of our group is insurance, which was the subsidiary that acquired Prudential’s life business last November. We also bought one of the biggest broker dealers in Korea last year, Daewoo Securities, and our ambition is to become the largest investment banking house in Korea.
We also have an insurance unit which is a domestic business. Our purchase in that area last year gives us a captive distributor, to collaborate more with product offerings.
We are open to organic and non-organic ways of growth, not only domestically in Korea but also internationally.
We bought a Canadian exchange-traded products (ETP) player five years ago, Horizons ETF. The Canadian ETF market has grown rapidly since then.
We also acquired one of the ETF players in Australia, BetaShares. It had around $300m assets on the management side three years ago, and is now up to $3bn in AUM.
We have around 200 ETFs trading on six stock exchanges globally: South Korea, Canada, Australia, Hong Kong, the US and Colombia. Out of our total $100bn in AUM, around $12bn is in passive investments.
What is your strategy for tackling the ‘vastly fragmented’ regulatory framework in Asia and also across the world?
Each jurisdiction in Asia has a different regulatory framework, which makes it more challenging to distribute Ucits products throughout the continent.
One of our strategies is to maximise our Ucits product distribution by white labelling. We have several successful white-label businesses in Japan and Thailand, and we may develop these in other countries as well.
In terms of distribution, we want to strengthen our local partnerships, possibly with white-labelled products.
Do your distribution channels cover anything from a smaller financial adviser through to a big bank?
A local partnership can provide a huge benefit for the local distributors. We have had successes with Swiss banks, global banks in the US, banks in southern European and large-scale commercial banks. We will always need strong partnerships with the key local distributors.
What can you share with us on your business plan for 2017 and beyond?
This year, the appetite for Asian products is relatively low, especially in China.
We are focusing more on our 10-year-old India sector leader equity fund this year and our emerging market bond fund, our fixed-income strategy that is designed to have low volatility.
We expect the investment sentiment for Asian equities to pick up gradually over the year and our offerings are expected to gain traction going forward.
Biography
Jung Ho Rhee is president and chief executive of Mirae Asset Global Investments, which is the Hong Kong office of Mirae Asset Global Investments Group. Prior to his current role, Rhee was head of global asset allocation for the entire group. Before relocating to Hong Kong in 2008, he was at Mirae Asset Securities in Seoul for eight years. Rhee has also worked as a market strategist for Daewoo Securities.
